Busted: Life Inside the Great Mortgage Meltdown
Busted: Life Inside the Great Mortgage Meltdown
The fiasco that sank millions of Americans, including one journalist, who thought he knew better. A veteran New York Times economics reporter, Edmund L. Andrews was intimately aware of the dangers posed by easy mortgages from fast-buck lenders. But, eager to buy a home and start a new life, he gave in to temptation and began a surreal adventure into the mortgage mayhem that nearly wrecked our economy. Busted weaves together the author’s own ride to the edge of bankruptcy with the tragicomic stories of his lenders, the Wall Street pros behind them, and the policymakers in Washington who were oblivious until it was too late. The story takes Andrews to the offices of Alan Greenspan, the mansions of subprime-mortgage millionaires in southern California, a despondent deal makers’ convention in Las Vegas, and Wall Street. Rich with on-the-ground reporting, Busted is a darkly humorous exploration of the cynicism and self-destructive judgment that led to America’s biggest economic calamity in generations.
It’s Saturday and that means it is time for Burbed’s book of the week. This week I selected this book because I think it is a must read. The reviews that is. You must read the reviews. And buy the book.
The reviews slam this book for being incomplete.
The fact is that this book highlights the pitfalls of buying real estate… in places that are not the Real Bay Area.
It serves this elitest, New York Times (which is no match for our SF Chronicle, San Jose Mercury News, or Mountain View Voice btw) writer to end up being financially wrecked by not buying in a place where real estate values double every 10 years on average.
Tough luck dude. Better start reading start reading this blog instead!
June 6th, 2009 at 11:24 am
The New York What? Hell they’re no Palo Alto Daily News…..
June 6th, 2009 at 4:37 pm
http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html?_r=1
http://business.theatlantic.com/2009/05/the_road_to_bankruptcy.php
The first one is his article in the NY Times, the second one talks about the bankruptcies his wife filed in 1998 and 2007, something he doesn’t talk about in either the book or the NY Times article. Certainly he tries to make it sound as if it was the fault of the lenders, when it really seems that it was their fault for continually spending more than they have, and refusing to cut back.
June 6th, 2009 at 5:44 pm
I agree, Cardinal, and btw, thank you for providing the links – I read this guy’s story in the NYT and thought I’d bookmarked it.
I marveled at this guy’s financial idiocy:
“The only problem was money. Having separated from my wife of 21 years, who had physical custody of our sons, I was handing over $4,000 a month in alimony and child-support payments. That left me with take-home pay of $2,777, barely enough to make ends meet in a one-bedroom rental apartment. Patty had yet to even look for a job. At any other time in history, the idea of someone like me borrowing more than $400,000 would have seemed insane.”
Not to place all the blame on his wife, but unfortunately, his story reads as though she has a spending problem and he has a problem in a failure to use his financial knowledge to rein in living above their means.
He writes:
“We had very different ideas about money. Patty spent little on herself, but she refused to scrimp on top-quality produce, Starbucks coffee, bottled juices, fresh cheeses and clothing for the children and for me. She regularly bought me new shirts and ties to replace the frayed and drab ones in my closet.”
And then there’s this gem:
“Between humongous loan balances and high rates, we had hung ourselves with the rope they gave us. In the previous December alone, we charged $2,845 on the Chase card for Christmas gifts, food, gasoline, clothing and other expenses. The charges included almost $350 for groceries, $700 in clothes from J. Crew, $179 at GapKids and $700 for airplane tickets for two of Patty’s children to visit their father in Los Angeles. Our balance climbed from $14,118 to $17,135, and in January 2006 we maxed out at our $19,000 credit limit. And there were other expenses on other cards: $1,200 in dental work for Patty’s son Ben; $1,600 to rent a beach house the previous year for us and all the children. Granted, the beach house was an embarrassing mistake. But given that Patty had landed a solid job, it seemed like an indulgence we could work off later.”
What’s with all this spending??….clothing (GapKids clothing and J.Crew are expensive compared to
good ol’ WallyWorld or thrift stores (aka ‘vintage’ stores), plane trips, RENTING A BEACH HOUSE???
One thing that irritated me is that the Times did not provide Reader Comments for this guy’s article, which I think, would have been APPROPRIATE considering he IS a financial writer for the NYT!
Thanks for allowing me to vent. With all due respect to Burbed (tips hat), I refuse to buy his book thus making a financial contribution to his life’s mess. I am ALREADY contributing to this Bailout thing going on….However, if he were to contribute 100 percent of this book’s profits to a recognized, reputable organization benefiting the homeless, then I would buy the book, but not with him pocking the profits, no way….
June 6th, 2009 at 7:17 pm
Thank you for the second link, cardinal. I already thought this guy was incredibly stupid (and, like SB123, wouldn’t give him 5 cents for his book) – but it was very interesting to read more of the story.
June 7th, 2009 at 1:53 pm
SB123: Also turns out that this wife is a serial bankruptcy filer. This is number 2 or 3 for that woman.
June 7th, 2009 at 8:43 pm
Yes, thank you zanon; many thanks to cardinal2007 for providing the link to the Atlantic piece.
I wonder how long the Andrews marriage will last…doesn’t seem to be a good fit: he’s a NYT financial writer and she has a history of being a serial BK filer with a current spending problem…hmmm